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Legal Alert Regarding New Labor Code Requirements

» Posted September 30, 2016News

Assembly Bill 1978 started as a law designed to protect low-wage, immigrant women from sexual assault and rape. It has resulted in a mandatory administrative prerequisite for all homeowners associations that engage the services of janitorial companies, with hefty fines for failure to comply.

Beginning July 1, 2018, Labor Code Sections 1420-1434 will require that each janitorial company register annually with the Labor Commissioner of the Division of Labor Standards Enforcement (the “Commissioner”) in accordance with prescribed procedures.  Registration is required to lawfully conduct business as a janitorial company. Training regarding sexual violence and harassment prevention is also now required for janitorial company employees, which is at the heart of the law.

Of importance to homeowners association and management companies is the requirement established on those that would hire janitorial companies. The Commissioner will be required to maintain a public database of “property service employers,” including janitorial service providers, on its website. Thus, it will be essential for managers and/or volunteer directors to check the online public database before entering into a contract for janitorial services.

The new law provides that any person or entity that contracts with an employer who lacks a current and valid registration, as displayed on the online registration database, can be substantially fined. For purposes of determining whether an entity has “contracted” with an unregistered janitorial company, the janitorial company must be registered whenever the contract is executed, extended, renewed, or modified, whether it is a subcontract or a primary contract. This means that any time an association contracts with a janitorial service in any way, including, extensions, modifications to existing contracts, and automatic renewals provided in the base contract, the volunteer directors or manager will need to verify the company’s valid registration.

The fines are substantial. The first time a homeowners association is caught contracting with an unregistered janitorial company, a civil fine of not less than Two Thousand Dollars ($2,000) nor more than Ten Thousand Dollars ($10,000) may be imposed. If it happens more than once the fine increases to not less than Ten Thousand Dollars ($10,000) nor more than Twenty-Five Thousand Dollars ($25,000) for a subsequent violation.